EMPLOYEE RELATIONS

1. EMPLOYEE RELATIONS Internal Communications is what a job listing would actually say

2. First, just because it is interesting… Millennials Will Benefit & Suffer Due to Hyperconnected Lives -- Pew Research Study • Become nimble analysts and decision makers • Lack deep engagement with people and knowledge Positive: Learning more and becoming adept at finding answers to deep questions Negative: Do not retain information, waste time on short meaningless information, focus on being entertained , and easily distracted

3. News of the Day: Windows 8

4. Employee Relations Communications to Employees must be Candid, Clear and Credible. In the midst of economic uncertainty and organizational change, it is critical for organizations to implement Effective, Believable, Persuasive internal communications.

5. Strong Employee Relations = Solid Organizations Proof of the growing importance of internal communications: • 60 percent of CEOs report to spending more time communicating with employees • Employees are suspicious, anxious and critical. Organizations must work harder to communicate honestly. • There is a HUGE gap between the very public salaries of senior leadership and “common workers.” • Continued movement toward globalization makes the integration of business and markets around the world a communication challenge. • Research shows that organizations that communicate with their people financially outperform those that don’t.

6. Strong Employee Relations = Solid Organizations • Increased importance! • Employees considered most important assets – not always the case. • Helps fill the “trust gap” that exists between management and workers. Intellectual Capital has value.

7. Dealing with the Employee Public Not as simple as it sounds: • Many subgroups with different motivations/fears; targeted messages is required. • Today’s staff is younger, increasingly female, more diverse, ambitious and career oriented, less complacent, and less loyal than in the past. • Effective internal communications requires management to ask: • Is management able to communicate effectively with employees? • Is communication trusted, and does it relay appropriate information to employees? • Has management communicated its commitment to its employees and to fostering a rewarding work environment? Lack of understanding leads to discontent, frustration, miscommunication & problems.

8. Trusted Communications in Uncertain Times REINFORCE • Respect -- R.E.S.P.E.C.T. • Honest Feedback – Let them know where they stand. • Recognition – Encourage early and often. • Voice – Give them opportunities to share! • Encouragement – Money and benefits only motivate to a point, employees need something else for long-term sustainability.

9. Trusted Communications in Uncertain Times According to Milton Moskowitz, coauthor of 100 Best Companies to Work for in America, six criteria have stood out over the years: • Willingness to Express Dissent – Employees want not just a voice – but a voice that can be critical without consequences. They want access to management and for management to pay attention. • Visibility and Proximity of Upper Management – Smart executives practice MBWA – “Management by Walking Around” • Priority of Internal to External Communications – Employees MUST learn critical information FIRST – not on the news. • Attention to Clarity – Your goal is to be understood. Period. • Friendly Tone – The best companies give a sense of family. • Sense of Humor – Helps to keep things in perspective and hopefully, make work not all work.

10. Mini Case Study: Sam Zell/Tribune Company • In 2007, Sam Zell, a real estate magnate, whom Gawker.com called the “salty billionaire”, bought the Tribune Company. • First order of business, he threw out the employee handbook and republished it leading with this: • Rule #1 – Use your best judgment. • Rule #2 – See Rule #1. • And this, “Question authority and push back if you don’t like the answer.” • But his communication was harsh, money-centric vs. employee centric, and aloof. SEE FOR YOURSELF. • In 2008, he was sued by a group of current and former Los Angeles Times reporters accusing him of “recklessness.” Four months later he filed for bankruptcy.

11. Credibility is the key! • Employees KNOW your business. They will know facts vs. wishful thinking. • One on one communication – supervisor to employee is most effective. • Research shows trust would increase if management: • Communicated earlier and more often. • Demonstrated trust by sharing both good news and bad news. • Involved employees by asking for ideas/opinions. • Employees are an organization’s best goodwill ambassadors. • Employees want to feel they are important and they are contributing to something important – nothing does that better and more quickly than being honest, letting them in on the good and the bad, and asking for their help.

12. An example (a bad one) “Just over a year ago, AOL embarked on an incredibly complex and significant transformation as we fundamentally shifted our business model from a subscription-based ISP to an advertising-supported Web company. Today I want to give you an update on where we are in this transition, and talk about further actions we’re taking and where we’re headed as a company.” -- AOL CEO Randy Falco, 2008 memo to staff TEN long paragraphs of mumbo-jumbo later, in paragraph ELEVEN he gets to the heart of the matter: “As part of this realignment, tomorrow we will begin a reduction in force that will, over the next couple of months, affect about 2,000 people out of our 10,000 person workforce.” 20 PERCENT LAYOFF!

13. S-H-O-C How does management build trust when employee morale is so brittle? • STRATEGIC • Where is this organization going? • What is my role in helping us get there? • HONEST • They can handle the truth • OPEN • Ask for feedback, make feedback channels regular and ongoing – but more importantly, show you’re doing something with it. • CONSISTENT • Be regular, on-time and predictable. Sometimes painful but helpful in the long run.

14. Internal Communications Tactics • Internal Communications Audits • Online Communications • The Intranet • Print Publications • Bulletin Boards • Suggestion Box/Town Hall Meetings • Internal Video • Face-to-Face Communications

15. And then, of course, the “Grapevine” • Address rumors immediately and directly • Explain how/why you came to a decision to avoid people filling in with their own back-story • Pay attention to the grapevine – it’s one of your best tools.

16. Case Study: Circuit City • In 2007, Circuit City was struggling to compete with WalMart and Best Buy and reeling from drastically reduced consumer spending. WTF were they thinking?!?! • On March 28, they announced they would fire 3,400 employees – 9 percent of their 40k staff. Their reason? People were making too much money and would be replaced by people willing to work for less. • “Retail is very competitive and store operations just have to contain their costs. We deeply regret the negative impact that was had on these folks. It was no fault of theirs.” • Fired employees were told to leave immediately but encouraged to reapply for their jobs – with less pay – after 10 weeks.

17. Case Study: Circuit City Predictable Backlash • “Circuit City Firings Blow Public Fuse” – Washington Post. The story quoted disgruntled CUSTOMERS offended by the horrible treatment of employees. • Offended that they went after “the little guys.” • Most fired employees made $11.50/hour; Circuit City CEO earned $716k/year plus a $705k bonus, $3 million in stock awards and another $350k in options. • Even analysts predicted, their hit in customer service (one of the only differentiators they had going for them!) would far outweigh the gain of cost savings. Not to mention the reputation management FAIL. • The company filed for bankruptcy just over a year later. • Despite bad press, when the CFO announced he was leaving, the revised the terms of his contract so the $1 million-a-year CFO could cash an additional $250k of option payoffs.

18. Case Study: Circuit City • How do you feel Circuit City handled the communication of the layoffs? • How would you have improved on the communications? • How would you characterize the company’s treatment of fired employees? • What would you have counseled management in terms of the departure of the CEO?

19. Unsolicited Career Advice #7 Your mom should never call your boss. Ever.